A few days ago I received another installment of the laments of a poor economy and how it affects ones ability to live the life they would like. I’m not sure any more if it’s just the economy’s effect on people or if there’s just a tendency for everyone to roll over and play dead about their options. Everyone faces higher prices and lower pay and what seems like fewer options. As a country or even a local economy, that’s true. As an individual, it does not have to be true at all. The perception is that however the country is going, that’s how the individuals go as well.
In basic accounting, or bookkeeping, or budgeting, there is one over-riding principle about a balanced budget. When the budget is out of balance there are two ways to deal with it. One is cut expenses, the other is increase income. (or both) I had to listen to how all of the problems of the country (or even world) were causing us to have to cut back here and do without there and just lower our expectations to the point where we could even survive the state we are in right now. Sorry, that’s one option, but it’s not the only option. I almost think the “doom and gloom” group is actually enjoying this bad state of affairs because it is something exciting to wring their hands over and say “I told you so!”
I’ve decided that whatever the economy in general takes away, I am going to replace twofold or even threefold. If it cost me $100 more per month in gas, I’m determined to increase income by $200 per month. If groceries go up by $50 per month, I’ll add $100 per month in income to offset that. If the dollar’s purchasing power looses 10% I’m going to increase income 20%. I can’t do that by working more hours or getting a better job. I can only do that by adding income producing assets, or growing my business.
If your tendency has been to reign in your spending and cut back on your life in order to cope with the new economy, it will work for a while. But there may come a time when there is no more to cut and no more to give up and you may look back and say to yourself, “Why didn’t I learn to increase my income instead?”
Learning a new skill isn’t that hard and real estate investing is a skill that can change the complexion of life forever. Both for you and generations to come. To me, this economy is telling us to prepare for living life at a lower standard that we’ve ever known before or prepare to live life at a greater standard than we’ve ever know before. I believe the majority will choose to be passive and reduce their standard of living. Will you be one of the minority who believes that the best defence is a strong offense?
Post a comment here if you want to link up with people who are moving forward and are finding opportunity in the chaos!